By and large, I tend to rely on the non-partisan website Factcheck.org to verify or debunk the various claims raised by both sides in the presidential election. And they tend to do a pretty good job of backing up their analyses.
However, in a recent posting analyzing the candidates' statements regarding the other's health insurance plan, Factcheck seems to miss the forest for the trees.
In its article, Factcheck tries to debunk the Obama campaign's assertion that the McCain health insurance plan will lead to the largest middle-class tax hike in history. Frankly, I have no idea (and Factcheck makes no effort to explain) what would constitute the largest middle-class tax hike in history.
In order to go further, a brief primer is required. John McCain's health insurance plan has two principal tax-related components. First, if your employer provides health insurance, you will be taxed on that amount. Currently, such employer-provided insurance is not considered taxable income. Under McCain, you will suddenly be hit with a higher tax withholding from your paycheck.
Second, McCain will provide a tax credit of $2,500 for individuals, and $5,000 for families (regardless of size or needs). Supposedly, you will be able to direct the government to send the credit directly to the insurer. How, exactly, that might work in the context of tax credit remains a mystery, since tax credits are offset by tax liabilities on your return. It seems possible that you could end up losing the benefit of the tax credit in the maw of other taxes, in which case you're SOL.
But in any event, follow this likely scenario: Health insurance costs, on average, about $12,000 per year for a family (and I've rounded down - it's actually a bit higher). Under McCain, you'll have to pay taxes on that. Assuming a low tax bracket of 25%, you'll owe $3,000 in taxes that you would not otherwise owe. Over 12 months, that $3,000 translates into taking home $250 less each month. Pause, and ask yourself, can you afford to reduce your monthly pay by $250 a month?
The tax credit, meanwhile, goes directly to the insurer. However, Factcheck does a calculation that would result in your having $2,000 left over to invest in a health savings plan or to spend on other health care. Of course, that's impossible, because the tax credit goes directly to the insurer. You will never see it, and thus will never be able to otherwise use the funds. (Presumably, Factcheck assumes that you will be entitled to a full refund and that the leftover credits will come to you on April 15).
However, if you end up owing taxes at year end, your owed taxes will be offset against the tax credit, resulting in a reduced (or potentially eliminated) tax credit. So at the end of the day, what are you left with? Less money, higher taxes, and the same health coverage you already have.
Even if you do get a full refund, you are still left with less money each month, higher taxes, and the same health coverage you already have, with the added bonus of having given the government a $2,000 interest-free loan for a year.
Lastly, bear in mind that this all assumes an employer does not discontinue providing health insurance. Because of the alterations the McCain proposal would cause to risk-pool insurance, experts note that within a handful of years after the plan is implemented, employers would begin dropping employee health coverage altogether.
What that would mean is you have to go into the market to buy your own insurance. At $12,000 a year, you will have to pay $1,000 per month out of pocket. Even deducting the $5,000 credit, you still pay $583 per month out of pocket. Again, do you have an extra $1,000 per month? How about an extra $583 per month?
What Factcheck then overlooks in its analysis is that, while the direct tax increase may not be the largest in history, the drain on middle-class disposable income may very well be, and may result in an economic disaster the likes of which (even today) we have never seen.
For another good take on the two health insurance plans being proposed by the candidates, this article at the Health Business Blog is a good read..
Showing posts with label insurance. Show all posts
Showing posts with label insurance. Show all posts
Tuesday, October 14, 2008
Tuesday, September 18, 2007
Clinton Campaign DOA
Mark it down - September 17, 2007 - the day Hillary Clinton's presidential campaign died.
The campaign doesn't know it yet - few do. But it's over. Done. She can never be elected President. Not after this.
As I noted yesterday, Clinton unveiled a mandatory health insurance plan that she plagerized from Mitt Romney, who created a similar plan when he was governor of Massachussets. I noted it was horrible, but thought to myself that between then and election day she would "clarify" the plan to reduce its draconian approach of penalizing the American worker.
I was wrong.
It was reported today that Clinton gave an interview to the Associated Press, wherein she went so far as to note that she could forsee the day when a person would be required to show proof of current health insurance before being allowed to work.
WTF!
On the radio today, her "economic advisor" tried to blabber something about taxes and how this will only be a percentage of someone's income. Newsflash dumbass - most people (myself included) cannot afford for the government to forcibly redistribute ANY percentage of my income.
Clearly it is not just Clinton who is completely oblivous to the real world, but she has apparently surrounded herself with others who are just as ignorant. This seems oddly similar to another completely detached president who surrounded himself with like(feeble)minded "yes" men.
It's over. Mark it down. September 17, 2007.
The campaign doesn't know it yet - few do. But it's over. Done. She can never be elected President. Not after this.
As I noted yesterday, Clinton unveiled a mandatory health insurance plan that she plagerized from Mitt Romney, who created a similar plan when he was governor of Massachussets. I noted it was horrible, but thought to myself that between then and election day she would "clarify" the plan to reduce its draconian approach of penalizing the American worker.
I was wrong.
It was reported today that Clinton gave an interview to the Associated Press, wherein she went so far as to note that she could forsee the day when a person would be required to show proof of current health insurance before being allowed to work.
WTF!
On the radio today, her "economic advisor" tried to blabber something about taxes and how this will only be a percentage of someone's income. Newsflash dumbass - most people (myself included) cannot afford for the government to forcibly redistribute ANY percentage of my income.
Clearly it is not just Clinton who is completely oblivous to the real world, but she has apparently surrounded herself with others who are just as ignorant. This seems oddly similar to another completely detached president who surrounded himself with like(feeble)minded "yes" men.
It's over. Mark it down. September 17, 2007.
Monday, September 17, 2007
Massachusetts Annexed by Europe
In today's news - Hillary Clinton makes love to the insurance lobby, Masschussets was annexed by Europe and nobody noticed, and Mitt Romney is a pot.
Health insurance and health care are expensive and not readily available to too many people. We all know this. Republicans try to ignore the problem by pandering to their insurance company donors and blaming "trial lawyers." The (mistaken) theory goes that trial lawyers and their gigantic fees from their frivolous lawsuits (you know, the ones that prevent gynocologists from practicing their love with women?) so run up the cost of medical care that, if only we could put a halt to those persnickity lawyers, medical care would be cheap and plentiful.
Nevermind that lawsuits (and verdicts) are trending down and that insurance companies are making record profits. Also nevermind that insurance companies don't make money by paying claims. Just stop the lawyers. (And, while you're at it, make sure that injured people quit suing, pick up their severed limbs, and get back to work - shiftless lazy good-for-nothings).
Meanwhile, the Democrats want to solve the problem by turning it over to the government. You know, the govenment that fabricated a war, created a Nazi-sounding "Homeland Security" department that doesn't actually do anything, and cannot repair just one major city that was flooded a couple years ago. Yet they can somehow effectively manage my health care.
Today, Hillary Clinton (D-NY), a Democratic candidate for President, unveiled her new health care proposal to much fanfare. Unfortunately, it's not new. Rather, she stole it from Mitt Romney, the former governor of Massachusetts, who created a virtually identical plan in his state.
The Romney Plan, which went into effect July 1, 2007, requires all residents to have health insurance. If they do not, and cannot obtain a waiver, then in the first year they will be penalized by losing their individual deduction on their state tax returns. In subsequent years, they will be penalized on their taxes at one-half the lowest cost of available insurance.
What a great idea. Rather than face the insurance companies and their bullshit underwriting practices or their denial of coverage scams, and rather than face the medical lobby and their hyper-inflated charges (allowed only because the insurance companies will pay them), how much more convenient to simply penalize poor people for not buying insurance they already can't afford. So now the working poor, people with low-wage jobs and no health care, who can barely make ends meet as it is, must now pony up their non-existent cash to pay for health insurance instead of food, housing, utilities, gas, etc. Brilliant.
Hillary's plan appears to be identical, making health insurance mandatory. Her people try to equate it with states making automobile insurance mandatory. Big difference here - I don't HAVE to drive a car. I sort of HAVE to continue to breathe. Driving a car is a privilege, not a right. Staying alive is, I'm pretty certain, a right (although I suspect some folk such as Bill O'Reilly would suggest it is only a privilege).
Moreover, what if I don't want health insurance? What if I so hate the insurance companies that I do not ever want to see them get a dime? What if I don't believe in traditional medicine? Why should I have to have insurance that pays for treatment I don't want and would never seek? What if I just flat out don't like being told what to do? It's my money, dammit, and if I want to spend it on beer and potato chips instead of blood pressure medication, then that's what I'm gonna do.
Worse, the Clinton plan would, as I understand, prohibit insurers from assessing higher premiums to people with pre-existing conditions. That's just stupid. Now, I'm no fan of insurance companies - I downright loathe them. But they do have a place and they have to be able to run their business in a reasonable fashion. People with pre-existing conditions are going to cost more to treat - consequently it should cost more to insure them. Insurance is based on risk - a healthy person is cheaper because there is less risk of paying out a claim. Sick people are more expensive because there is more risk of paying out a claim. Duh. But if the insurance company cannot charge more for people who will cost more, then they will simply charge more for everybody.
Remember, insurance is not a public service - it is a for-profit business that makes money via taking premiums and investing them, then retaining the return on those investments. When they pay claims, they lose both their investing power and some of their return, which means they and their shareholders make less money. Because their incentive is to make a profit, not protect your health, they will act in a manner to maximize profits.
And now Clinton is playing right into their hands. Imagine a world where the government mandates that the public buy your product, whether they want to or not. The ironic part is that the large-scale implementation of this fiasco is being proposed by a Democrat and not a Republican. Apparently not all insurance company investments generate the expected returns after all.
But let me get to the best part - the killer funny twist of this whole mess. Romney, who created this very program when he was Governor of Massachussets, calls the Clinton plan something inspired by "European bureaucracies."
"Instead we should take our inspiration from the American people. Hers is a plan which I think underscores the fact that she fundamentally does not believe in markets and in the states. And I believe that our inspiration should come from American families."
My score - Mitt=Pot, Hillary=Kettle, Massachussets=France, Insurance Industry=$$$$$$, American Working Family=Anally Raped (and without insurance to pay for the treatment).
Health insurance and health care are expensive and not readily available to too many people. We all know this. Republicans try to ignore the problem by pandering to their insurance company donors and blaming "trial lawyers." The (mistaken) theory goes that trial lawyers and their gigantic fees from their frivolous lawsuits (you know, the ones that prevent gynocologists from practicing their love with women?) so run up the cost of medical care that, if only we could put a halt to those persnickity lawyers, medical care would be cheap and plentiful.
Nevermind that lawsuits (and verdicts) are trending down and that insurance companies are making record profits. Also nevermind that insurance companies don't make money by paying claims. Just stop the lawyers. (And, while you're at it, make sure that injured people quit suing, pick up their severed limbs, and get back to work - shiftless lazy good-for-nothings).
Meanwhile, the Democrats want to solve the problem by turning it over to the government. You know, the govenment that fabricated a war, created a Nazi-sounding "Homeland Security" department that doesn't actually do anything, and cannot repair just one major city that was flooded a couple years ago. Yet they can somehow effectively manage my health care.
Today, Hillary Clinton (D-NY), a Democratic candidate for President, unveiled her new health care proposal to much fanfare. Unfortunately, it's not new. Rather, she stole it from Mitt Romney, the former governor of Massachusetts, who created a virtually identical plan in his state.
The Romney Plan, which went into effect July 1, 2007, requires all residents to have health insurance. If they do not, and cannot obtain a waiver, then in the first year they will be penalized by losing their individual deduction on their state tax returns. In subsequent years, they will be penalized on their taxes at one-half the lowest cost of available insurance.
What a great idea. Rather than face the insurance companies and their bullshit underwriting practices or their denial of coverage scams, and rather than face the medical lobby and their hyper-inflated charges (allowed only because the insurance companies will pay them), how much more convenient to simply penalize poor people for not buying insurance they already can't afford. So now the working poor, people with low-wage jobs and no health care, who can barely make ends meet as it is, must now pony up their non-existent cash to pay for health insurance instead of food, housing, utilities, gas, etc. Brilliant.
Hillary's plan appears to be identical, making health insurance mandatory. Her people try to equate it with states making automobile insurance mandatory. Big difference here - I don't HAVE to drive a car. I sort of HAVE to continue to breathe. Driving a car is a privilege, not a right. Staying alive is, I'm pretty certain, a right (although I suspect some folk such as Bill O'Reilly would suggest it is only a privilege).
Moreover, what if I don't want health insurance? What if I so hate the insurance companies that I do not ever want to see them get a dime? What if I don't believe in traditional medicine? Why should I have to have insurance that pays for treatment I don't want and would never seek? What if I just flat out don't like being told what to do? It's my money, dammit, and if I want to spend it on beer and potato chips instead of blood pressure medication, then that's what I'm gonna do.
Worse, the Clinton plan would, as I understand, prohibit insurers from assessing higher premiums to people with pre-existing conditions. That's just stupid. Now, I'm no fan of insurance companies - I downright loathe them. But they do have a place and they have to be able to run their business in a reasonable fashion. People with pre-existing conditions are going to cost more to treat - consequently it should cost more to insure them. Insurance is based on risk - a healthy person is cheaper because there is less risk of paying out a claim. Sick people are more expensive because there is more risk of paying out a claim. Duh. But if the insurance company cannot charge more for people who will cost more, then they will simply charge more for everybody.
Remember, insurance is not a public service - it is a for-profit business that makes money via taking premiums and investing them, then retaining the return on those investments. When they pay claims, they lose both their investing power and some of their return, which means they and their shareholders make less money. Because their incentive is to make a profit, not protect your health, they will act in a manner to maximize profits.
And now Clinton is playing right into their hands. Imagine a world where the government mandates that the public buy your product, whether they want to or not. The ironic part is that the large-scale implementation of this fiasco is being proposed by a Democrat and not a Republican. Apparently not all insurance company investments generate the expected returns after all.
But let me get to the best part - the killer funny twist of this whole mess. Romney, who created this very program when he was Governor of Massachussets, calls the Clinton plan something inspired by "European bureaucracies."
"Instead we should take our inspiration from the American people. Hers is a plan which I think underscores the fact that she fundamentally does not believe in markets and in the states. And I believe that our inspiration should come from American families."
My score - Mitt=Pot, Hillary=Kettle, Massachussets=France, Insurance Industry=$$$$$$, American Working Family=Anally Raped (and without insurance to pay for the treatment).
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